Below are some of the most common questions that are posed to our staff of CPAs in New York. We have listed them below to help you, if you are looking for a tax CPA in New York (NYC).
General FAQ
1. Why do I need a CPA?
If you are self-employed, have a business or are a freelancer, just like a large corporation, you need a CPA to look after your accounts, audit and perform nearly every financial advisory service for your business or as an individual tax payer. As CPAs in New York with licenses to practice in Maryland, we provide general accounting, tax planning and preparation, estate planning, representation of the clients in government agencies, and any other related financial advice that is required.
2. What is your background?
Jonathan MEDOWS, our Managing Member is a Certified Public Accountant in New York, New Jersey and Maryland. He received his Bachelor of Science, magna cum laude, in economics and accounting and Master of Business Administration in finance from the Stern School of Business, New York University. He also received a Master of Arts degree in Judaic Studies with a concentration in Modern Jewish History and was ordained as a rabbi by the Jewish Theological Seminary of America.
Mr. MEDOWS has worked as a staff accountant for Arthur Anderson and was a senior consultant in the restructuring group of KPMG. As a CPA in New York, he serves a multitude of industries and individuals in USA, UK, China, Germany, Poland and the Netherlands.
3. How much do you charge?
We usually charge $500-$10,000 depending upon the individual or company requirement. Usually, an average tax return costs between $500 and $800. For small businesses, the fee tends to be between $500 and $1,500. However, you can contact us to discuss your case and accordingly, we can give you a quote.
4. What do you expect from your clients?
As a CPA firm in New York, we deal with numerous businesses, corporations, clergy, self employed business owners and individuals and realize that accounting and taxes may not be your most important worry. We strive to make keeping records, accounts, audits and tax-related issues as simple as possible. However, as a CPA firm in New York, we expect that you come prepared to discuss your goals, questions and problems so that we can work with you and find better solutions for your taxes in New York.
5. What is included in your fee?
For New York taxes, preparation of all the necessary federal, state and local returns and an initial estimated tax calculation is included in the fee. You can also ask questions during the course of the year.
6. You file taxes in New York, but do you deal with government agencies and IRS?
As a CPA in New York, New Jersey and Maryland, we are legal representatives of our clients for any IRS-related concern, query or audit, so we can represent you. For small business owners, freelancers and self-employed individuals in New York, chances of being audited by the IRS is less if a New York CPA works with you.
7. When should a client call for tax filing issues?
For filing taxes in New York, it is best to give a call to our office in December, January or early February. It is not necessary that you need to have all your accounts updated, or all information ready for filing taxes before you give us a call. We can work it out after we talk to you.
8. What are the services that you provide as CPAs in New York and Maryland?
Being a CPA firm in New York, we provide a host of personal and business services catering to numerous small business units, clergy and religious institutions, freelancers in New York and self employed individuals. These are a few of our services:
Personal and Business Services:
- Income tax preparation for individuals, freelancers, sole proprietorships, single member LLCs, multi-member LLCs, S-corporations, C-corporations, trusts, estates, non-profits
- Preparation of prior year returns outstanding with both the IRS, NYS and other tax authorities
- Personal financial planning
- Tax planning and preparation
- Litigation and operational consulting
- Conducting financial audits, reviews and compilations
- Preparation of sales tax returns
- Expatriate tax returns
- Compromise agreements with IRS and other federal, local and state authorities
- Business structuring
- Entity formation
- Business wind-down
- Complete accounting and tax solutions
For more information on other services that we provide, please visit our Services page.
9. I live outside of New York or have multiple state tax returns, can you help me?
Yes, we can help you resolve your New York State tax filing issues. Please contact us to discuss more about your requirements.
10. In which states are you licensed?
We are CPAs (Certified Public Accountants) in New York, New Jersey and Maryland.
11. How do you work with your clients?
We are flexible. We can meet in person after setting an appointment, over the phone or by email. We can then discuss all aspects of tax preparation in New York and start working accordingly.
12. What is your tax preparation process?
Working as CPAs in New York, we initially set an appointment to talk about your current financial status or tax year and discuss the future goals, plans and business requirements that we can help with. You will then submit the tax documents and other financial documents that we may request. With our experience as New York Certified Public accountants, we will start preparing your New York tax returns and if there are any questions, we will reach out to you.
A draft of your NYC income tax return will be submitted to you for your review. If required, we can discuss your return over email or phone and, in case any revisions are needed, a revised draft is sent for review. Once the return is finalized, we will either e-file or paper file your NY income tax returns. We will then invoice you. You will also get an e-file containing the final draft of the tax return and some final documents we need signed for our records.
13. I need to calculate my W-4 exemptions. How do I do it?
Complete the worksheet that is attached to the W-4 form for computation of exemptions or hire a CPA in New York to help you.
14. Can you E-file our returns?
Yes, of course. If your tax return can be e-filed, our New York CPAs will certainly handle it.
15. Is it possible to claim my parents as dependents, if they have no income?
Yes, it is possible to claim your parents as dependents when you file income taxes in New York but you will need to prove and document through your credit card charges or payment of bills that you are paying their expenses.
16. If I get audited, will you be able to help me?
Yes, as experienced Certified Public Accountants in New York City, we get many inquiries every year from small business owners, freelancers and individuals who are having partial or complete tax return audits. We can help you get ready for the audit, correspond with the IRS on your behalf and, if required, represent your interests to the IRS.
17. If I file electronically, do my chances increase of being audited?
No, there are no set rules for audits. In most cases, the IRS uses computer-generated models that check mathematically for discrepancies in high tax deductions vs. the income filed. Even if you file your NYC income tax in the traditional way, it will be converted to digital and will have no relation to whether you will have a higher chance at being audited or not.
18. Do I need to wait until December – January to contact you about filing my New York income taxes?
No, you don’t need to wait until December or January. All through the year there may be many tax complications and questions that arise. It is best to contact a Certified Public Accountant in NYC to answer your tax related questions and help you make the right tax decisions that save money. We ensure that if we work together, we will help you make the right economic decisions and provide tax advice to minimize taxes owed.
19. Do I need to keep my tax and filing records forever?
No, you don’t have to keep your New York City income tax and filing records forever. Items related to real estate (such as purchase price, capitalized costs) should be retained until at least seven years following the disposition of the real asset. For securities, purchase prices should be retained for seven years after the disposition of the security. For other records, such as profit and loss statements from freelancer activities or from businesses, both the financial statements and the underlying receipts should be retained for New York taxes for at least seven years. In general records should be maintained seven years from filing of your federal, New York State and New York City tax returns.
20. If I have back taxes or tax debt in New York, can I still pay online?
Yes, you can. We can help you resolve your tax debt issues in NYC. Please contact us for more details.
21. Is it true that if I e-file my taxes, refunds are faster?
It is true. If you e-file your NYC income taxes, the IRS will send your refunds in half the time. Usually, refunds are sent directly to your bank accounts, making it safer for you.
22. How will you get my signature if you e-file my tax return?
Usually, there is no need for your signature when a New York Certified Public Accountant e-files your returns. The 5-digit PIN, or personal identification number, is required in place of the conventional signature.
23. I received a 1099, so how does that impact my taxes?
A 1099 is issued when you work as an independent contractor and not an employee. There are no withholding, employee benefits or payroll taxes that are deducted from the payment you receive. All business expenses, vehicle mileage and other expenses should be maintained in a journal to show expenses when you are preparing your income taxes in New York City. If you are expecting a substantial paycheck, it is best to file for advanced income tax payments. Alternatively, you can contact a CPA in New York for more details.
24. Aside from taxes and accounting, what do you do?
As a CPA firm in NY, we also assist with cost control, planning and investments, financial statements and tax audits, bookkeeping, sales tax returns, payroll returns and personal financial statements and clergy taxes.
25. What technological enhancements separate you from other firms?
Our firm provides our clients with many advantages from our advanced technological infrastructure including:
1) Our proprietary tax software (TaxWorkFlow) to better track each stage of our clients’ tax return.
2) Electronic data storage for keeping client’s records and final return secure in electronic format.
3) A concerted effort to go green by reducing our carbon footprint by transitioning, whenever possible from paper documents to electronic formats. Inclusive of this is electronic filing of most business and personal tax returns and electronic copies of tax returns for clients.
4) Client portals which allow clients to download drafts and final returns.
5) The convenience of online appointment booking.
6) The hosting of our website on our own servers for enhanced security and the development of our sister website cpaforfreelancers.com which features a blog and offers free advice and resources on the site and via an email subscription.
7) The acceptance of payments via ACH debit along with check and credit cards via Google checkout.
8) The offering of Rapid Anticipation Loans via Chase Bank for clients who need tax refunds on an accelerated basis (additional fees fromChase and our office will apply).
26. How would you describe the market position of your firm?
We view ourselves as the right fit for people who have outgrown H&R Block or Liberty Tax and who need the services of a New York City CPA. We are here throughout the year and available to help our clients with issues that come up…not just the three months of tax season.
We also view ourselves as an alternative to the larger regional tax firms where many of our clients have complained they got lost in the shuffle. We pride ourselves on the personal touch we provide while simultaneously leveraging the latest technology to assist our clients with NYC tax issues.
27. I haven’t filed past tax returns, can you help me?
Rest assured, you are not the only ever to find yourself in the predicament of needing a NYC CPA for prior year tax returns. We routinely handle such matters and can assist you going back to the mid 1990’s to file your delinquent NY tax returns, delinquent federal tax returns, delinquent NYC tax returns and other outstanding tax returns.
28. What’s an expiring tax refund and should I concern myself with this?
In general, taxpayers have three years from the due date of a tax return to claim a refund owed by the IRS, NYS, NYC or other tax authority. If you do not file an original or amended return within three years you lose the ability to claim a refund. A NYC CPA specializing in self-employed taxes, freelance taxes, and small business taxes, such as our firm, can help you prevent this from happening.
FAQ For Freelancers
1. I did some work in 2013 but have been paid in 2014, so will I pay the taxes in 2013?
If you did not receive payment until 2014, you will need to pay taxes on that payment in 2014. You can’t count on the money until you receive it. The earnings will need to be counted in the same year that you receive the money.
2. How do I figure the quarterly tax as I work as a freelancer?
The object is to pay more then what you should so that at the end of the year, you can get money back. Estimate how much you are going to pay the IRS and divide it by 4, the number of payments you need to pay yearly. Then you can take the total and send it to the IRS as part of your tax payment.
3. What happens if I forget to pay any one of the quarterly payments and I work as a freelancer?
If you forget to make a payment then make it as soon as you think about it and get back on schedule. If it is close to the next payment when you think about it then go ahead and make two payments at one time. It’s better to pay it late then not pay it at all. Payment should be sent on April 15, June 15, September 15, and January 15.
4. As a freelancer, what business deductions can I make?
A key tax deduction for any freelancer is the home office deduction. In addition to a calculation based on the square footage of your home office, you can use a portion of your utilities, mortgage payment, taxes paid, and interest paid as part of your deductions. If you purchase a new computer system, fax, furniture, office supplies, travel expenses, or business expenses you can use all of these expenses as deductions.
5. What is a 1099 form? As a freelancer do I need it?
The 1099 form is used if you are hired as a subcontractor. You are not considered an employee though. This form will be mailed to you by the company that hired you as a subcontractor. The company is under no obligation to send you a 1099 form if you made less then $600. However it is still your responsibility to report the income you made.
6. Which federal deductions are freelancers eligible for?
You can deduct any expense used to help you run your business. Make sure you keep receipts for everything you want to use as a deduction. If you purchase something else on the same ticket, make sure you itemize what you need to deduct from your expenses so you will know during tax time.
7. Why do I, as a freelancer, need a CPA?
When you run your own business, you may find it hard to keep track of your business and keep your books straight. When you hire a CPA you relieve yourself of this burden. A CPA can help you keep everything balanced and assist you in paying your taxes quarterly. They can also assist you throughout the year.
8. I worked with more than one employee and the total amount of social security taxes withheld is more than the maximum limit allowed. So, how will I be able to get the money returned?
When you file your taxes this year be sure to include the amount that you paid toward social security taxes. Your CPA will assist you in reporting this so you can get your money back. It’s important to keep track of how much you paid into social security taxes so you know how much you can expect to get back.
9. Do I need to keep my individual tax returns forever?
No. You need to keep your tax returns for seven years. After that, you should be in the clear and you shouldn’t be audited on those returns. When you do dispose of your returns, make sure that you shred them using a paper shredder.
10. I work from home…is it necessary to let the IRS enter my house?
No. The only time an IRS employee has permission to come to your home is when they have an invitation from you or someone in your home. There is an exception to this rule though. IRS can enter your home if they have a court order. If a field auditor comes to your home to verify a deduction that you claimed on your taxes you still do not have to allow him or her in. Unfortunately, if they cannot verify your deduction you will not be able to claim it.
Income Tax FAQ
1. How can a CPA help me with my income taxes in New York City?
If you are a small business owner, a freelancer or otherwise self-employed in New York City, it is imperative that you have a CPA to look after your income taxes. A Certified Public Accountant in Manhattan will do more than just help you file and prepare your income taxes, they will also provide you with valuable financial advice and will represent you in government agencies in the case of an audit.
2. What can a CPA in NYC do for my income taxes that a CPA elsewhere can’t?
New York City is the financial capital of the country, and a CPA based there will have more experience handling a wide variety of income tax related issues than accountants in other areas. When entrusting your income taxes to a CPA, it is important that they have the most experience possible, and a NYC based CPA is your best bet.
3. What kind of information do you need from me to file my income taxes in New York?
We strive to make your New York income tax experience as smooth and simple as possible, but it is important that you provide us with all of the appropriate documents and that you come prepared to discuss your goals, as well as any problems or questions your may have concerning doing your income taxes in New York City. The more prepared you are, the easier your NYC income taxes will be to handle.
4. When should a client contact you concerning Manhattan income tax issues?
If you are filing your income taxes in New York City, it is best to contact us in December, January, or at the latest, by the first week of February. You do not have to have all of your accounts updated or all of your NYC income tax info on hand when you call. We will be able to discuss everything that needs to be done regarding your New York income taxes after our initial conversation.
5. You file income taxes in Manhattan, but do you also have the ability to represent a client if they’re audited by the IRS?
Yes, in addition to filing income taxes in Manhattan, we can represent clients in the event of an audit and assist them with the process.
6. If a client’s income tax return does get audited in New York, can you help them?
Yes, in the event that your New York income tax return does get audited by the IRS, we will be able to help you prepare for the process, as well as correspond with the IRS on your behalf.
7. What are some of the income tax services that you offer?
We offer a variety of income tax services for small businesses, freelancers and individuals living in New York and abroad, including:
- Income tax preparation for individuals, freelancers, sole proprietorships, single member LLCs, multi-member LLCs, S-corporations, C-corporations, trusts, estates, non-profits
- Preparation of prior year returns outstanding with both the IRS, NYS and other tax authorities
- Personal financial planning
- Tax planning and preparation
- Litigation and operational consulting
- Conducting financial audits, reviews and compilations
- Preparation of sales tax returns
- Expatriate tax returns
- Compromise agreements with IRS and other federal, local and state authorities
- Retirement planning
To see all of the Manhattan income tax services we provide, please visit the following page: Services
8. Do you provide income tax advice for clients that don’t live in New York?
Yes, of course. You do not have to live in NYC for us to give you income tax advice. We have worked with clients all over the world, including clients from the United Kingdom, Germany, Poland, The Netherlands, Panama, Israel and China. Rest assured that you do not have to live in New York in order to receive advice on your income tax issues.
9. Can you help resolve multiple state income tax issues for those who live in other states in addition to New York?
Yes, we can assist clients with multiple state income tax issues. Please contact us for more information about your requirements.
10. Do you have the ability to e-file income tax returns?
Yes, of course. We will promptly e-file your federal and state returns as soon as they are finished. Unfortunately, NYC unincorporated businesses cannot yet be e-filed (as of April 2010) as NYC does not allow for e-filing of tax returns.
11. If I e-file my New York City income taxes, will I get my refund sooner?
Yes, you will receive your refund from the IRS sooner if you e-file your New York City income taxes. Normally, your income tax refund is sent directly to your bank account.
12. Is it necessary to hold on to all of my previous Manhattan income tax and filling records forever?
No, you don’t need to hold on to your Manhattan income tax records forever. However, it is a general rule of thumb to hold on to all of your important Manhattan income tax related documents for at least seven years.
13. What is the New York income tax preparation process with your firm?
When assisting our clients with their income taxes in New York, we initially set an appointment, discuss the their current financial or tax situation and discuss their future goals, plans and business requirements. Clients then submit any income tax documents and other financial documents that we may request. Once these NYC income tax documents are in place, we start preparing the New York income tax returns and if we have any questions, we will contact the client.
We will submit a draft of your Manhattan income tax return to you for your review. If needed, we will discuss any necessary revisions and a revised draft of your income taxes will be prepared for further review. Once the return is finalized, we will either e-file or paper file your NYC income tax return. You will then receive an invoice. You will also receive an e-file containing the final draft of your New York tax return, as well as some documents that we will need you to sign for our records.
14. Do you provide any services in addition to Manhattan income tax filing and accounting?
In addition to providing our clients with income tax services in Manhattan, we also assist with planning and investments, financial statements and tax audits, bookkeeping, cost control, sales tax returns, payroll returns, personal financial statements and clergy taxes.
15. Can you assist those who have previously not filed their New York City income taxes?
Yes, we can assist individuals who have not previously filed their NYC income taxes. We routinely handle cases of delinquent income taxes in NYC and can assist you with NY state and federal income tax matters going as far back as the mid 1990’s.
16. Who do you provide income tax services for?
Our Manhattan based firm specializes in providing income tax services for freelancers, small business owners, and the self-employed. If you are in need of income tax assistance in NYC, do not hesitate to contact us.
17. Are you licensed to file income taxes in states other than New York?
Yes. We are also Certified Public Accountants in New Jersey and Maryland, so we can help you file your income tax returns in those states in addition to helping you in New York.
18. Do you have experience filing income taxes for s-corporations and LLCs?
Yes, in fact our New York City based firm specializes in filing the income taxes of small businesses of all varieties.
19. Can you offer advice for small business and freelancers outside of income tax issues?
Yes, we are able to provide our clients with advice on various freelancer and small business related matters outside of regular income tax issues.
20. Do I have to wait until NYC income taxes are almost due to contact you?
No, of course you don’t have to wait. You may feel free to contact us regarding any issues or questions you may have about your NYC income taxes or any other concern you may have. Our office is open year round.
Tax FAQs for Foreign Citizens in the United States
1) I do not have a green card yet, but I am small business owner in New York City engaged in business during the year, so do I have to file taxes in the U.S.?
A: The short answer is yes. An individual nonresident alien who is engaged in a business in the United States during the year is required to pay New York small business income taxes for income earned within the United States.
2) I will need to leave the United States in a few months, will I need to have a ‘sailing permit’ or obtain a certificate of compliance?
A: The sailing permit is required for nonresidents who have taxable income during the taxable year and resident aliens who will be leaving the United States with out any expected date to return. You will need to complete Form 1040-C, which is a Departing Alien Income Tax Return and then you will be granted a sailing permit. If you owe any income taxes in Manhattan, you will need to pay them when you turn in your Form 1040-C otherwise you will not be able to leave. The purpose of the sailing permit is to make sure that you are accepting full responsibility for the taxes that you owe so they won’t go unpaid.
3) As an alien or non U.S. citizen running a LLC in NYC, do I qualify for, and get the benefit of, any deductions and credits?
A non-resident Alien who has a LLC or other small business in New York can claim deductions but they cannot be related to income that is not from the United States. There are personal exemptions as well as certain itemized deductions that you can claim as long as you can provide proof that they are connected to your U.S. income.
4) On a visa, how many days do I have to be in the U.S. to pay taxes?
Your income is considered free from federal and New York taxes if you were not in the United States for more than 90 days during the year. You are also exempt from federal and Manhattan income taxes if your total income was less than $3,000 from your work in the United States. If you run a business for someone, or perform work overseas, your income is not subject to taxation. If you receive compensation in addition to your wages in order to travel or if you pay into a pension or retirement fund from a U.S. source, then you will need to pay income taxes in New York City. At the end of the year, you need to make sure that you have figured in those 90 days in order to see a small tax break.
5) What are the rules for paying inheritance tax for green card holders living in the U.S.?
A resident alien will be required to report any type of income: wages, interest, inheritance, dividends, property, royalties, and other types of income on their tax return. You are required to report this income whether you are from the United States or not. Remember, a green card holder is liable and responsible for taxes and interest the same as New York and United States citizens. It is required to report this information so the correct tax amounts can be paid so the inheritance is free and clear after you receive it. Paying the taxes and interest on the inheritance before you get the money will ease your mind and won’t leave you in debt later.
6) Are there New York tax obligations if I surrender my green card or U.S. permanent resident status?
If you surrender your green card, you will need to receive an official notice from the United States Citizenship and Immigration Services, or USCIS. Your tax status will terminate on the last day of the calendar year. You will be responsible for the Manhattan income taxes that have incurred while you were living in the United States. These taxes will need to be paid in full before you will be allowed to surrender the green card or give up your U.S. permanent resident status. You can fill out a 1040-C form on your income taxes in New York when you are ready to leave the country. Make sure that you have documentation that you did pay your Manhattan taxes before you leave, in case you need to prove it.
7) I am on a student visa (with no U.S. citizenship or green card), will my interest income be taxed?
Any interest income that is not connected with a United States trade or U.S. business will not be included in gross income. However, this is the rule as long as your income comes from a U.S. bank, U.S. savings and loan association, U.S credit union, U.S. insurance company, or a portfolio interest. You should turn in Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding to an institution. You will need to report any income you make while working as you are going to school on your income tax returns in New York. This is true with the exception of on-campus jobs as well as any job given to you by the USCIS.
8) As a foreign student, how do I know if I am exempted from U.S. Social Security and Medicare taxes?
If you are a foreign student in NYC, you may be exempt from U.S. social security and Medicare taxes if you work on-campus up to 20 hours a week or 40 hours a week during the summer months, if you work off-campus and are employed with a company that is approved by USCIS, or if you are enrolled in practical training student employment on or off the campus. Additionally, if you are employed by a physician, au pair, or summer camp worker, this rule doesn’t apply to spouses and children, employment not approved by USCIS, non-immigrants who changed immigration status, or immigrants that become resident aliens.
9) I am a foreigner and work for an international organization in the U.S. Can I get exemption under U.S. tax laws?
Wages that are paid to employees of international organizations in the United States may be exempt from income tax in the United States due to provisions in a tax treaty or a consular convention between the United States and the country you are from, or by you meeting the requirements of the United States tax law. An employee of international organizations will only qualify for an exemption from wages from the United States and Manhattan income tax if you meet the requirements of the U.S. tax law. You will only be exempt from income received for services that were performed by a foreign government or international organization. Any other income must be reported on your income taxes in New York.
10) I am a green card holder and have a source of income from a family business in my home country. Do I have to disclose that income to the IRS and pay income taxes in Manhattan?
If you are not an employee but receive wages from a family business, you are subject to paying U.S. and NYC income taxes while living in the U.S. File Form 1040NR-EZ as well as 1040NR in order to file your forms correctly. If you helped in the family business and did receive income from that business while you were employed but still resided in the United States while working, you will be subject to taxes as it will be considered income. You don’t need to pay your taxes twice so if you pay it in your country, you will need to add it to the forms when you file your taxes in the U.S.
11) I don’t have a green card yet but run my own small business in Manhattan. However, I am completely confused about which form to fill and where to file my taxes. Can you help?
Whether you have your green card or not, the rules for filing income and gift taxes in New York are the same. You have to file regardless of where your residence is. If you live in another country or you are a non-resident alien, you can file your tax returns to the Internal Revenue Service Center in Austin, TX 73301-0215. If you file, or if you are claimed as a dependent, you will need a social security number to present on your tax Form 1040-C. You can also inquire at the Internal Revenue Service located at P.0. Box 920 Bensalem, PA 19020.
12) I am from India on a work visa. Do I qualify for standard deductions?
If you were a non-resident alien or you are considered a dual status alien during any portion of the year, you are not entitled to the standard deductions. However, residents of India can qualify for some standard deductions if they meet certain specific criteria. If you reside in India, you will receive a certain amount of standard deductions that you can claim if you work in the United States while living there. Some standard deductions, like childcare, child credit, mortgage interest, business expenses and more are considered itemized deductions on income taxes in Manhattan, which you can also benefit from. It’s important that you keep all your receipts throughout the year.
13) I am on a work visa, can I claim any tax benefits?
You will be able to itemize some deductions while working in the United States if you are required to report your income. The deductions include medical or dental expenses incurred throughout the year, state and New York income taxes paid, real estate taxes, interest paid on a mortgage, charity information, theft loss, and other miscellaneous deductions.
14) What is the taxable income and rate of green card holders?
A green card holder is considered a permanent resident of the United States. This means that for any income you make, you will need to pay federal and New York income taxes on that income. This is on income that you make world wide. When there is an income tax treaty between the United States and the country you are from, you may be exempt from some of the taxes, otherwise, you will need to pay taxes to both of the countries. You should get a break from taxes on one of the two countries, depending on where you work and how you get your money. It is a requirement that 30 percent of the payment be given to the IRS if it is from a non-resident. If you are a green card holder, you should not have to pay the 30 percent.
15) With green card status, if I am based away from the United States do I have to file taxes in the U.S. on the income I earn away from US?
Anytime you are a resident of the United States, full-time or part time, you will need to file taxes in the United States for all the income earned in the United States or another country. Filing taxes requires the basic form 1040-C and other basic forms in order to file. When you have your green card, you are considered a resident. You will also need to report your income to the country that you are staying in part-time. You will need to show proof that you are paying taxes to one or both of the countries in order to get a break at tax time. You shouldn’t have to pay taxes twice as long as you can show proof.
FAQs for New York City Income Tax Audits
If you plan to move to New York City for a temporary stay it is recommended you consult a Manhattan CPA so you know your tax liability. New York City is the only city where temporary residents pay income tax. The following FAQ will serve to highlight the important features of New York City and state tax regulations.
1. When is one considered a resident in New York City for income tax purposes?
The tax regulations define a New York City resident as person who is domicile in the city and a person who is not domiciled but maintained a permanent place of abode in the state for eleven months or more of the NYC tax year. A domicile is defined as a person with a permanent and legal physical address in New York City. The physical address is the home of the domicile where he intends to stay for an indefinite period of time. A New York City domicile lives, occupies an apartment or a home, works, votes, and/or attends school in the NYC. Section 605(b)(1) of the Tax Law defines a none domicile resident as a person who maintained a permanent place of abode in the state and spent more than 183 days, of the year under consideration, in NYC.
2. When is one considered a temporary resident in New York City for income tax purposes?
A temporary resident is a person domiciled in a state other than New York State who is on a temporary stay in New York City for a work assignment or for education purposes.
3. Which taxes are people required to pay as a temporary resident in New York City?
Those on temporary stay in New York City are liable to pay income tax on all income earned during their stay. They are liable to pay New York City income tax on all income including income that is earned outside of the city.
4. When is a resident of New York City exempted from paying income tax?
A person who is domiciled in New York City is considered a resident. He or she is liable, under section 605(b)(1)(A) of the tax code, to pay income tax. A resident is exempted from paying tax if he or she did not have a permanent place of abode in New York City, did not maintain a permanent place of abode elsewhere and spent 30 days or less in New York City.
A resident is also exempt if he or she spent at least 450, out of 548 consecutive days, abroad and if during the 548 days he or she was present in New York City for 90 days or less and his or her spouse was present in New York City for 90 days or less in a permanent place of abode maintained by the taxpayer.
5. Are temporary residents in New York City exempted from paying income tax?
If a temporary resident rents an apartment in New York City for more than 12 months they are only exempted if they stay for 183 days or less. It is the taxpayer’s responsibility to prove illegibility for the exemption. For this reason you must produce supporting documents such as travel receipts and written contracts. These taxes are normally reimbursed by employers to relieve employees of unplanned expenses. The tax margin is higher if the taxpayer opts to stay in New York City.